Growth hacking is becoming a more popular term amongst modern day marketers. It is not a short cut or a way to cheat a system but it is a process of rapid experimentation across marketing channels. The goal is to identify the most effective, efficient ways to grow a business.

In this episode I talk with Jim Mackay (@canuckinco). Jim currently advises technology start-ups in the Colorado area via Scape, a tech accelerator program. Jim also serves as President of Impyrium. Impyrium produces industrial sensors and controls for unmanned vehicles like drones so they can safely be used for commercial applications.

Jim and his team recently found an interesting freely available dataset to use for his business. In our growth hacking case study, Jim explains the methods they used after obtaining the data and how this dataset jump started his pipeline with targeted prospects.

Contact Jim

Transcription

What are you doing lately? Are you at home? Are you on the road?

Jim: I’m home. I’m home a lot more than I have been in previous years but home is a good place. I’m in Durango, Colorado working with a startup called Impyrium. We founded it back in September and we focus on sensor and control systems for commercial and industrial applications, which sounds really sexy but it is a lot of fun.

How is this different than other things you have worked on?

Jim: Yes. So this is the first — as you know I spent the last 30 years doing software in particular enterprise software and then the last 10 of that working with startups. This is the first hardware startup I’ve been involved with. The co-founders are a couple of really smart engineers with skills in electrical engineering as well as mechanical engineering and we get to play with electronics all day and generate things on 3D printers and you know, get our hands dirty. So it’s a lot of fun.

What are some of the immediate differences that maybe you expected and some that you didn’t?

Jim: Well, with software you can go in very quickly and make a modification to something that isn’t working right and essentially put it back out there, whether it’s an app and you put an upgrade for an app or you just put a new version in the cloud. With hardware, you have to go through a full product recall so one of the biggest things with hardware is getting it right the first time. You still go through, you know, as a startup we still work on the lean model, you know, Eric Ries’ Lean model where we get in minimum viable product right and get it out to market. Even getting the MVP going is a bit of a challenge because you go through some design cycles which require you to source components and a lot of times those components come from overseas. You get them together. You test it. If it doesn’t work right, you have to repeat that cycle. So the release cycles, if you will, are a lot longer and you don’t want to get in a situation where you have a recall.

If you’re just three guys trying to do this you obviously have, I would assume, a small budget for marketing?

Jim: Yeah. You would assume correctly. It’s fairly small budget for marketing and you know, one of the additional challenges is when your two co-founders are engineers they don’t necessarily understand how much work and how many resources have to go into marketing in order to get the promotion out there. They tend to think that it happens fairly easily. So it’s a little bit of a challenge wrestling enough money out of the overall budget to do the marketing. So you do what you can to hack it out and you know, the number one metric with a small company is growth. So growth hacking has become a term in the startup world for probably the last couple of years and we truly follow a lot of, you know, what is considered growth hacking in order to raise awareness, get out brand out there, generate interest in our products and push customers across the line.

Are you guys doing anything like growth hacking? Did you find anything interesting to help leverage your business?

Jim: Yes. So I think your definition of growth hacking is dead on. It’s using the materials or the sources that you have available to you or that are available either free or cheap. You know, in our case with it being hardware it’s a bit of a different challenge. The number one thing — we basically to this point have been working in stealth mode and we have one customer who we worked on now for three different projects. As a result of working with this customer we have created and invented some pretty cool stuff which we’ve been lucky enough to be able to retain the rights and the IP too that we have then applied for patents and we will basically start to offer that commercially real soon. So having a happy customer is a great resource and having them be able to get out and do referrals for you is very, very valuable. When you’re a small company people worry about the risk of working with you, having your customers be able to come back and be a referral for you or to recommend you. It helps to essentially reduce that risk by increasing the trust and your ability to be successful. In our case going beyond that, we’re starting to come out of stealth mode and put our products out there for sale and we’re thinking about what it is we want to do next. So since we’re in the industrial space and since we have this kind of cool product which is the six degree of freedom joystick which allows you to be able to move things in three dimensional space whether it’s, you know, a tail at the end of a robot or other things. We thought well, what moves in three dimensional space that’s an exciting right now and we’re going to start to move in to the industrial drone space.

As we thought about how to penetrate that space, we did our research and found that the FAA has certainly been involved in being controlling the growth or controlling the rogue aspects of growth of the industrial drone space or even the private drone space and they’ve put a bunch of rules in place that restrict where it is you can fly and what it is you can do and how big your drone can be and that’s called section 333. So as we thought about how to penetrate the drone space and we did this research, we realize that you can apply for an exemption to the section 333 rule to be able to allow you to fly commercially and because of the FAA it is a government database which is essentially public. So we were lucky enough to go basically hack into that public database and scrape that for the names of the 6,000 companies who have applied for exemptions and then with a little bit more leg work that, you know, I dumped on an intern, we’re able to build a pretty contact list and so we wanted to use these contacts and a couple of ways obviously this is a first market penetration that we want to be able to go out and sell to but also because it’s a new space for us, we want to learn what problems we could solve that were universal and were something that people were willing to pay for a controller for instance and a new version of a controller to be able to have a better, you know, more precise and accurate flying and with less crashes and collisions.

So, you know, we started reaching out to this database contacts and because we don’t have a product in the market yet we basically say, hey, can we pick your brain for 15 minutes? Get on a phone call and essentially learn from you what your challenges are, and that not only helps us build a better product that’s going to meet the needs of the market and then essentially know what to focus on for a minimum viable product but it gives us a relationship with these folks and the right to be able to ask them when we do have a product can we come back and show it to you, which is a step towards moving them down the conversion phone.

Scott: That’s pretty interesting. Walk us through how you found the database. I mean, you said you hacked into it.

I would assume that this is information that doesn’t need to be stolen but did you guys have to file like a freedom information act or was this just online or how does that work?

Jim: No, it’s out there. It’s on the FAA website and some other folks have taken that and broken it down by a few different categories. So we’re able, for instance, to search by geography. I live right in the Southwest corner of Colorado so we thought that our first outreach should be to drivable companies that we could essentially drive to in, you know, five or six hours. So from here that’s a circle that includes Denver, Albuquerque, Phoenix, Salk Lake City and you know, kind of all the areas in between. The reason we want them to be drivable is, again, because we’re a hardware company. We want to be able to go out there with the physical product and meet with them and essentially have a demo day at the other end. And I also think that it’s easier to approach folks that are within a geographical proximity to you and say, hey, we’re just up the road and we’re doing this cool thing that we think might be applicable to you, you know, a problem that you might be having.

Scott: Yeah and I think, you know, overall from growth hacking I think the geographical proximity is important, right? Because as you get started, and you talked about this earlier about the risk of doing business with you. If you can see somebody and, you know, you can reach out and touch them it’s a whole different relationship than if you’re just talking to somebody on the phone or if you’re e-mail only. It’s really, really tough to build a relationship. So, you know, growth hacking by geography is probably less risky for them, a new customer.

Jim: Completely agree. And it goes through the entire life cycle of the customer, right? So if you are able to not just, you know, work with them and get them as a customer but you’re able to keep them wildly happy with your product by giving them, you know, face to face customer support I think that goes a long way as well. So our plan is to grow geographically outward and to have customers that we can get to initially very quickly. Our first customer that I mentioned that we’ve been working with for the last six months is in the same town as us and the ability when they call you and say, Hey, this isn’t quite working like I expected,” for us to say we’ll be there in 10 minutes, I think it goes a long way to keeping the customer happy.

Scott: Yeah and I think, you know, when people are marketing a new product even if it’s software, hardware, you know, some type of mobile app or something that, you know, is distributed via the internet, they kind of want to boil the ocean and they think too big, right? They don’t really create like this niche and really focus on that niche and I think that’s the downfall of a lot of programs that I look at. It is they’re just trying to do too much and they can’t handle it. If you start small and just be successful you can grown from there because what you’re doing is building, you know, really good customer relationships.

Jim: Yeah. And I think that, you know, the crawler to that is you want to obviously pick big problems to solve because that’s your market. So figure out a way that you can solve big problems one small problem at a time and that allows you to be able to knock down little dominos along the way to solving that big problem. So you’re minimum viable product for instance should solve the most burning small problems that your intended customer base have and that it also helps with your messaging, right? I think that people tend to boil the ocean with their messaging as well and say, hey, you know, I’m going to try and tell you all the cool things that my product does and usually what they end up with those result is a very garbled message where people can’t just pick out the essence and the nuggets or don’t even take the time to try and figure out where the nuggets are within that message to say “How does this help me with my day to day problems?”

How do you contact these people? Did you call them? Did you e-mail them? Or what did the information contain? And then after that, you know, when you started contacting these folks, what did they tell you that was unexpected?

Jim: So the contact is kind of interesting and I think it’s important because it kind of brings up the notion of AB testing. We started with an e-mail and we struggled for awhile to try and figure out even the subject line for the e-mail because we wanted to make sure that they actually opened the e-mail. So we tested with our first probably 20 contacts. We tested 10 different e-mail subject lines and you know, tried to refine that and then the message within the e-mail, we kept it as concise as we could, you know, started with what our intention is so they know right away that, you know, we want to reach out and have a 15-minute conversation about the challenges that they face with being service providers in the industrial drone space. We also created multiple landing pages that we refer to that have more details within there and then of course put analytics on those landing pages to figure out who opened them, how long they stayed, where they went next. There are multiple calls to action on the landing pages, etc. So you know, your classic A to B testing of both your message and your flow within that and we got so-so response to reaching out with e-mail first. Probably about 5% to 10% of people got back to us and said yes, they’d be interested in talking to us but we know that a lot more actually opened up the pages and, you know, went through and looked at the data so that gave us I guess enough confidence to then follow up with the ones that didn’t get back to us with a phone call and we had a lot more luck with just getting out there and dialing.

If you read Eric Reis’ books about, you know, developing minimum product in the Lean model, etc., I mean, the number one thing they talk about is early in the process to “get out of your office.” So that’s why we put this initiative in place in the first place is to go and talk to these folks and I think the most effective way to answer your question is to call them up, get on the phone with them. These are fairly small companies. It doesn’t take a long time to figure out how to get through the, you know, the company to the right person. Usually the person answering the phone is the one you want to talk to.

Scott: Yeah, true. And I mean I’m really glad that you had more success on the phone. I’m a big proponent of the phone because it’s more personal and e-mail is great but the problem is that it’s really easy to automate e-mail and send a lot of e-mails so everyone does it because it’s easy and it’s like a road in the effectiveness for everyone just because there’s so much e-mail floating around out there. It’s easily ignored. But a phone call, you know, it just feels better.

Jim: Yeah. Completely agree. And you’ll learn a lot more because you can take the conversation in all sorts of directions that maybe you didn’t even anticipate getting on the call and you know, the key is once you hang up that phone, write down everything you just heard, you know, because you want to look for commonalities. You know, in our case we’re doing research as part of this as well so we’re trying to look for commonalities across these conversations.

Scott: Yeah. Either write it down or there’s software available where you can record calls just like I’m recording this, you know, go back and listen to it because you can’t take all the notes because you’re trying to think of the next question to ask the person to so record it as well if you can.

Jim: And if they want you to. I think the only downside of recording is, you know, I feel like I need to tell people that they’re being recorded as part of the conversation early and I think it really affects what they say and how they say it when they know they’re being recorded. You don’t get as much of a candid conversation.

Scott: Yeah, well true and you need to look at the different laws of the different states as well. I tend to forget that because in Texas if one person on the line knows that it’s being recorded then it’s legal. You don’t have to notify them. They’re maybe different in Colorado. All right. Well, cool. So in terms of other things that you guys are going to be doing in terms of this growth hacking nature I’m assuming it’s going to take awhile to get to this database. Are you looking for other tricks or you think this is good enough or you know, kind of what’s the next step? And then you know, obviously if you give us the next step I’m assuming that the next step is probably going to be cost you a little or nothing as well versus your time.

Jim: Yeah. So you’re right. I think it’s going to take awhile obviously to work our way through this thing. We want to close the loop with the information that we get from these calls and spend a couple of months working on the first version of the product so that we can send it, turn around and go back to these folks and say, hey, we’ve got something ready to drive out to you and to let you fly around. So we will be kind of forging ahead with some of the other stuff that we want to do around messaging. I think that at the same time that we’re going to be working on the engineering side of the product the information that we’re gathering from these calls is helping us essentially market and message as well and be able to refine that. So we would be doing some more traditional stuff along the lines of, you know, identifying our key words and getting those out there so that we can get both paid a natural search working for folks that do wake up with this problem and are trying to actively go and find a solution for it. At the same time we’re starting our outreach program to the actual drone manufacturers which again is a said phone calls, but we want to be crisp on the message that we deliver to these folks on the phone. And, you know, after a phone call people the model these days or the flow these days is if they’ve never heard of you before the call they’re going to go – if they’re interested they’re going to go do some research on you so you want to make sure that you’re online real estate is up to snuff. They may start in an unorthodox ways. They may actually for instance go look up your LinkedIn profile now that they know who you are and look at your background, so it should be clean and point them to, you know, basically from there to your landing page on LinkedIn which should drive them from the material that you got in there should drive them to want to learn more a new website.

By then, we’d like to have some anecdotal information on our website as well. Some case studies and things that they can start to learn about the product without us just trying to walk them through feature functions. So it’s going to start to get into more traditional marketing but I think everything that I mentioned there is still essentially free. In the end you want to get the conversions and you want to get it to the point where they’re calling you as opposed to you calling them so continuing to build and iterate through that machine that drives them through the funnel to the point where they show active interest and you make a natural connection which leads to a sale. That was a pretty vague answer, Scott but, you know, the first thing that’s come to mind for me are tools we’d be able to measure. I think one of the most important things with growth hacking is that everything that you do should be measurable and that you’re trying different experiments and AB testing along the way and seeing what works and what doesn’t with everything from your messaging to calls to action to what you say about your product. So free tools, you know, Google Analytics is great. I mean, being able to go through and comb behavior on your website I think is just an invaluable tool so we get very heavily into using Google Analytics. I think that overtime we’re also asking for permission obviously to be able to reach out to these people on a regular basis so using free tools such as, you know, the early versions of Mail Chimp to be able to control what goes out through mail. Working that into, you know, marketing automations down the road should be very easy when we’re ready to actually pay for market and automation system.

Scott: Yeah. It’s so easy to measure all these things but you know, you can’t get over your head with that stuff because that stuff isn’t cheap but you’ll grow into it. How do people contact you? What’s your favorite social channel of choice?

Jim: I’m out there all over the place. I’m easy to find on LinkedIn but my Twitter handle is canuckinco because I’m Canadian, I live in Colorado, so it’s easy to remember. So that’s probably the easiest way to find me.

If you weren’t doing this hardware business and you know, keeping your feet wet in a startup world, what would you do with your time?

Jim: Well, how I ended up with this company is actually through one of my hobbies which is we started a startup accelerator here in Southwest Colorado about 3-1/2 years ago called Scape and we’ve had 15 companies go through it and I spent a lot of time mentoring and trying to work with those companies. It’s been really fulfilling and great to, you know, foster economic development here. As far as playing around, it’s summer time. I like to get out on my houseboat and go surfing behind my surf boat and ride in bikes and traveling the world.

Scott: Cool, cool. Well, thanks Jim for your time today. It’s always a pleasure and good luck with Impyrium.